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Pune-based startup NeuroTags uses algorithms, Artificial Intelligence to detect counterfeit products

The e-commerce market in India is growing at a fast pace with the penetration of smartphones and the Internet. According to a report by Admitad, in 2017, 37 percent of the population comprised of internet users, 14 percent of whom made online purchases regularly. This population's share of internet users is expected to grow to 45 percent by 2021. Along with the rise, a disturbing trend that is being witnessed is the rise in counterfeit products. Around 38 percent of consumers out of 6,923 respondents said they had received a counterfeit product from an e-commerce site in the past one year, a survey by LocalCircles revealed, according to The Economic Times report.

As per an ASSOCHAM-Resurgent joint study, online shopping is expected to clock annualised growth of 115 percent this year, aided by fast-increasing data consumption and improvement in logistics, along with a number of offers presented by e-commerce platforms. The dangers of fake products will only increase given the rapid rise in e-commerce shopping in India.

Focusing on how to eliminate counterfeiting of products, three  friends from Pune – Nitin Gupta (39), Yogesh Miharia (30), Abhishek Agarwal (29), have launched a startup that provides a digital solution to detect counterfeits. Called NeuroTags -- Neuro is derived from ‘neuron’ in the neural network “as we feel the future of the fight against counterfeit will rely on machine Learning a lot. And our internal algorithms are modelled on it”. The startup was conceived in early 2017 and was launched in January 2018 with seed money of  $300,000 from the three founders' personal savings and a consulting firm, Tezminds (started by the trio six years ago.)

“The idea was to help the manufacturers keep the track on their products and save it from counterfeiting,” says Nitin Gupta- Co-founder, CEO and CTO. With the help of NeuroTags, companies can also acquire their offline end customers’ product interaction data, he said.

How it works

NeuroTags provides algorithmically coupled tags, namely open and protected. The open tag is visible on the product and can be scanned by anyone with a smartphone to get the information about the product and an indication of authenticity with a certain probability. Once a product is purchased, the buyer has access to the protected tag, which is shielded by a scratch layer or is kept inside the product seal. After scanning the protected tag, the user gets the authenticity information with certainty.

(l-t) Co-founders Yogesh Miharia, Nitin Gupta and Abhishek Agarwal

(l-t) Co-founders Yogesh Miharia, Nitin Gupta and Abhishek Agarwal

The user may also avail warranty, loyalty and referral points after scanning this tag. The tags are connected, monitored and protected by algorithms and Artificial Intelligence on the cloud servers in such a way that, if anyone tries to replicate the tags, it gets caught and the copied product gets invalidated.

Gupta said Neuro Tags did a study for a year before launching the startup which revealed that close to one million people die every year because of fake medicines. An estimated $1.6 tonnes of counterfeit goods are sold every year which is increasing at a very fast rate, said Gupta. “With e-commerce, it is becoming very easy for the counterfeiters to penetrate the supply chain and contaminate the complete market,” he said. Yet, he said it was difficult to convince the companies, as nothing has been done like this before. The startup has six clients so far.

The startup plans to introduce the pay-per-use model. “Based on the number of items where NeuroTags are applied we plan charge a very small fee per item,” said Gupta.

The startup hopes to breakeven in two years and is in talks with some investors who would like to join them as business partners in the venture.


Updated Date: Nov 28, 2018 13:52 PM

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